In his annual Mansion House speech to the Corporation of the City of London last night he said that £500m had been earmarked to speed urban house-building through the planning system.
The initiative will deliver 200,000 news homes while also protecting the greenbelt, he said.
“We need to see a lot more homes being built in Britain. The growing demand for housing has to be met by growing supply,” he said.
“We’ve got the biggest programme of new social housing in a generation; we’re regenerating the worst of our housing estates; and we’ve got the first garden city for almost a century underway in Ebbsfleet. Now we need to do more. Much more.”
Conscious that Conservative voters are not keen on despoliation of the countryside, Mr Osborne said: “We have beautiful landscapes, and they too are part of the inheritance of the next generation. To preserve them, we must make other compromises. If we want to limit development on important green spaces, we have to remove all the obstacles that remain to development on brown field sites. Today we do that with these radical steps.
“Councils will be required to put local development orders on over 90% of brownfield sites that are suitable for housing. This urban planning revolution will mean that in effect development on these sites will be pre-approved – local authorities will be able to specify the type of housing, not whether there is housing.
“And it will mean planning permission for up to 200,000 new homes – while at the same time protecting our green spaces.”
Mr Osborne will sit down with the Mayor of London Boris Johnson today and work out plans for new housing zones across London to promote construction of thousands of new homes in the capital.
“And we’ll take the same approach in the rest of the country; with almost half a billion pounds of financial assistance in total set aside to make it work,” he said.
To address fears of the housing market overheating, the chancellor is also giving the Bank of England powers to intervene if it fears mortgage lenders are being too cavalier.
“If the Bank of England thinks some borrowers are being offered excessive amounts of debt, they can limit the proportion of high loan to income mortgages each bank can lend, or even ban all new lending above a specific loan to income ratio. And if they really think a dangerous housing bubble is developing, they will be able to impose similar caps on loan to value ratios – as they do in places like Hong Kong,” he said.